Cineplex ordered to pay $38.9M by Competition Tribunal in ticket fee case

Original Publication Date September 23, 2024 - 6:51 PM

TORONTO - Cineplex Inc. says it will appeal a record $38.9 million fine for deceptive marketing practices imposed by the Competition Tribunal.

The fine was embedded in a decision the tribunal issued late Monday that saw it side with the Competition Bureau in a case stretching back to May 2023. That was when the watchdog accused Cineplex of misleading theatregoers by not immediately presenting them with the full price of a movie ticket when they purchased seats online.

"The consumer is deceived or led astray by the contradictory and incomplete information on Cineplex’s tickets page, which obfuscates the existence and quantum of the online booking fee," the tribunal said in a two-page information outlining its decision.

The online booking fee it referred to is a $1.50 charge Cineplex began including in June 2022 to many customers not enrolled in its CineClub subscription and Scene Plus loyalty programs, which saw the fee waived and dropped to $1, respectively.

The bureau alleged the fee constituted "price dripping," a practice when customers are drawn into a purchase without full disclosure of the final cost.

Cineplex, however, vehemently denied the accusations, saying moviegoers are promptly told about fees they may face and can avoid them all together by purchasing seats in-person at a theatre.

Cineplex maintained that view on Monday, after the release of the tribunal's ruling.

The company said in a statement it was "shocked" by the decision and pointed out that online booking fees are presented on its website and app "in a clear and prominent manner."

"We believe our guests make informed purchase decisions and remain confident our online booking fee is presented in a way that fully complies with the spirit and letter of the law," Cineplex said.

The $38.9 million fine Cineplex has now been handed is equivalent to the amount it collected from consumers through the $1.50 online booking fee between June 2022 and December 2023.

On top of the fine, the tribunal ordered Cineplex not to engage in the same conduct that prompted the case for a period of 10 years.

While the Competition Bureau did not immediately respond to a request for comment about Cineplex's announcement that it would appeal the ruling, the head of the bureau earlier on Monday evening called the tribunal's decision "a resounding win for Canadians."

"It sends a strong message that businesses should not engage in drip pricing and need to display their full prices upfront," Competition commissioner Matthew Boswell said in a statement.

"Businesses that fail to comply with the law risk significant financial penalties.”

Boswell and the bureau's case was helped along by June 2022 amendments to the Competition Act designed to recognize drip pricing as a harmful business practice.

The tribunal says it expects to detail the full reasons behind its decision and order next week, once the organization has worked with Boswell and Cineplex to identify "confidential or competitively sensitive information" that must be redacted.

This report by The Canadian Press was first published Sept. 23, 2024.

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